Workshop on Tax & Accounting Updates and Customs Audit

 On 14 September 2022, the workshop on “Tax & Accounting Updates and Customs Audit” was held at GMAC in collaboration with GMAC and KPMG Cambodia to further explain to the members the impact of the recent accounting law updates. And also summarize the tax and customs audit process as well as share experiences on document preparation for PCA.

More than 150 participants from GMAC member factories attended the workshop.

Source: GMAC

4th Meeting About Minimum Wage 2023

 National Minimum Wage Council Holds Fourth Meeting to Discuss 2023 Minimum Wage

(Phnom Penh): The National Minimum Wage Council on the afternoon of September 13, 2022 held its fourth meeting to discuss the minimum wage in textiles, garments, footwear and travel products and bags for 2023.

As a result of this tripartite meeting, the following minimum wage positions for 2023 were obtained:

Representatives of the workers' side raised three different figures: 206 USD with 8 votes, 210 USD with 3 votes and 213 USD with 6 votes.

- Employers' representatives agree to take the figure of USD 197 as their internal unanimous vote

Representatives of the Royal Government, based on technical and scientific characteristics, set the figure at 198 US dollars.

The National Minimum Wage Council will hold a final decision meeting to set the minimum wage for textiles, garments, footwear and travel products and bags for 2023 on September 21, 2022, next week before Pchum Ben.

CDC Approved Toyota’s Assembly Plant in Phnom Penh with $36.7M Project

 An assembly factory costing $36.7 million will be built in Phnom Penh by Toyota Tsusho Manufacturing (Cambodia) Co Ltd, according to a statement issued by the Council for the Development of Cambodia (CDC). The CDC's Cambodian Special Economic Zone Board (CSEZB) yesterday approved the registration of the aforementioned investment project.

In the publicly traded Royal Group Phnom Penh Special Economic Zone (Royal Group PPSEZ) along National Road 4, about 8 kilometers from Phnom Penh International Airport, Toyota would hire about 150 personnel to operate an assembly line for Toyota brand cars, according to the release.

According to Sokkong, who is also the MISTI spokesman, these auto assembly plants are situated in Phnom Penh, Pursat, and special economic zones in Poipet of Banteay Meanchey and Bavet of Svay Rieng province. He also noted that large manufacturing firms, including Japanese companies, typically take at least five years to conduct market research.

Because they have a long-term perspective on business, he added, "They always conduct studies very thoroughly on the investment environment, business environment, government policies, and market before entering our country to set up factories. This means they come to our country to assemble automobiles not only to supply the domestic market but also overseas markets."

Source: Council of The Development of Cambodia (CDC)

Demand of Green House Production in Garment Sector-GMAC

 EuroCham paper mirrors the demands made by GMAC over the past few years. It’s important to look at the issue of capacity charges and make the policy more favorable for solar installation. This would address international market demands for green production as well as most buyers’ policies and commitments to meet their renewable energy targets. Environmental protection has become a very serious issue now.

Say Samal, the environment minister, examines a collection of solar panels in Kampong Thom province in February 2021. Content image courtesy of Phnom Penh Post. MOE The industrial sector is being urged by the European Chamber of Commerce in Cambodia (EuroCham) to adopt effective renewable energy (RE) policies, and the government is being urged to do away with capacity fees for solar energy and embrace renewable sources entirely. The Royal Government of Cambodia [RGC], as stated in the Power Development Plan [PDP] 2040, has prioritized guaranteeing dependable, cheap, and improved energy security, according to EuroCham's "Position Paper on Renewable Energy in Cambodia," which was published on September 2.

But it added that "[RE] is the most important factor for the continued, renewed, or initial investment into a market, followed by affordability and reliability, for international manufacturers and investors in higher quality production, those with high carbon neutrality targets, and those who consider investing into sustainable production in attractive markets."

The government-run utility Electricite du Cambodge (EdC) imposes a monthly "capacity charge" based on the demand contracted with customers that join at higher voltage levels, although this currently only applies to solar systems. This is something that Germany's GIZ has pointed out. All other technologies are subject to a straightforward, one-part per-kWh tariff.

"Capacity costs are too expensive," continues EuroCham. For bigger solar systems, the cost of solar electricity is approximately $0.07/kWh, but for smaller systems, the cost is $0.84/kWh. This contradicts the regulation's stated purpose and renders the investment unappealing and unprofitable from an economic standpoint.

"The installation of solar rooftops could encourage Cambodia to make the switch to clean energy and assist in supplying the country's rising demand."

"A full endorsement and support of rooftop solar by the Cambodian government would be a huge step towards modernizing Cambodia's manufacturing base, to green the country's image, and to become more competitive while better integrating itself into regional economies," said Tassilo Brinzer, chairman of EuroCham.

EuroCham continues, "Capacity costs are too high." The cost of solar electricity is roughly $0.07/kWh for larger solar systems, whereas it is $0.84/kWh for smaller systems. This goes against the declared goal of the rule and makes the investment unattractive and economically unprofitable.

The installation of solar rooftops "could inspire Cambodia to switch to renewable energy and help meet the country's expanding demand."

According to Tassilo Brinzer, chairman of EuroCham, "the Cambodian government's full endorsement and support of rooftop solar would be a huge step towards modernizing Cambodia's manufacturing base, to green the country's image, and to become more competitive while better integrating itself into regional economies.

In order to assist Cambodia compete with Vietnam, Thailand, and other nations, the document promotes the complete installation of solar infrastructure in industrial complexes and industries, coupled with greater investments in the region.

Enabling rooftop solar adoption might reduce carbon emissions, develop a "future-proof industrial sector in sustainable energy" led by solar technology, and free up money for the government to spend less on power-related expenses.

Although the Kingdom currently uses 51% renewable energy, this percentage is anticipated to fall to 35% by 2030 and then rise to 43% by 2040. Over the ensuing two decades, this would result in a decrease in RE consumption of 8.1% overall.

The majority of apparel companies are under pressure from clients to install solar, according to Rogier van Mansvelt, vice head of EuroCham's Green Business Committee. The payback time is now between four and eight years, but the current tariffs eliminate around 50% of the solar advantage. Additionally, the installation's 50% capacity is impeding the proportion of solar replacement. "Cambodia should establish favorable solar rooftop laws and rates if it wants to continue to be attractive to investors in the apparel industry," he said.

According to EuroCham, 10GW of solar energy and 1.5GW of wind power could potentially result in $6.8 billion in investments for Cambodia in terms of investments. This serves as an example of the potential of RE.

In more detail, a recent UNDP research on luring new FDI (foreign direct investment) found that … ‘Cambodia has the potential to attract significant private sector investment in solar PV, estimated at $903 million across the four solar PV sub-sectors to achieve the report’s targets’."

Source: Phnom Penh Post

01-Sep-2022 Progress on Meeting About Minimum Wage for 2023

 At the third meeting of the National Minimum Wage Council, the workers 'representatives reduced the figure from 215 US dollars to 213 US dollars, while the employers raised the figure from 194 US dollars to 196 US dollars. The National Minimum Wage Council has calculated that the minimum wage figure for 2023 is 197.86 US dollars.

Source: MoLVT Offical FB Page